The service of robo-advisors that provide advice on asset management using computers is rapidly expanding. Hong Kong startup AQUMON co-founder & CEO Mr. Kelvin Lei said in an interview with the Nikkei Asian Review that AQUMON would partner with a major Japanese financial institution in 2020. The main conversation exchanges are as follows:
1) Who are your target customers?
AQUMON and its app makes use of AI, etc. to provide advice on asset management. "It's for both financial institutions and individuals. While in Hong Kong offers individual wealth management services through the app for most of AQUMON's mainland Chinese partners it offers services to individuals through banks (B2B2C). For example, Guangzhou Rural Commercial Bank with 8 million individual customers can use AQUMON's services through their banking app.''
"It's really easy to use. Download the app on your smartphone, follow the steps and fill out the required fields to open an account in less than a day. Answer the risk questions and you will find a tailor-made asset structure (portfolio). With just one click you will start investing and the algorithm starts monitoring your assets. It advises you on rebalancing assets in response to market trends. "
2) Many startups have joined robo-advisor industry (but AQUMON has a clear point of differentiation):
"AQUMON's strength is that we built our own algorithms all in-house. Many companies that claim to be robo-advisors do not have their own algorithms but purchase them from outside the company. We have more than 70% of our employees with R & D experience and a good number of sales representatives. We developed our core technologies independently. "
"By partnering with about 60 financial institutions in mainland China and Hong Kong, assets under management have increased five-fold in 2019 versus 2018. Robo-advisors expect to follow the same path as smartphone payments which have spread rapidly in China. China's financial markets are young and many consumers have no access to investment advisors. In comparison, robo-advisors are transparent and inexpensive and will be widely used in the next three to five years. The asset management potential in China is valued at 100 trillion yuan (about 1600 trillion yen), and we expect a 20-30% to shift to the robo-advisor market. "
3) What is your outlook for the next 20 years?
"AQUMON plans to introduce a new function for individual investors to hedge (avoid) risk. We are also looking forward to Japan, which has the second largest market in Asia after China. He believes Japan has a lot of potential for robo-advisors because of his willingness to go digital. AQUMON visited multiple big Japanese banks and securities firms in 2019 and received positive responses. AQUMON wants to partner with Japanese financial institutions in the next 20 years. "
4) Will computers replace humans in the world of asset management?
"I don't think so. Only humans can provide more customised tax and inheritance advice for the very wealthy. However, the general public will likely use robo-advisors. For example, one large Hong Kong bank has a reach of over one million customers but they may only have about 500 investment advisers. So robo-advisor will play an important role in this situation (helping banks better service the wealth management needs of their customers). "
5) It sounds like you previously worked at a bank:
"When I was working at the bank I was in charge of selling derivatives, but in some cases it wasn't in line with the interests of customers. I wanted to change this and that is why I choose this investment advisor's path. ''
Mr. Kelvin Lei received a master's degree from the University of Foreign Economics and Trade in Beijing, China. Previously in charge of fixed income institutional sales at Credit Suisse and Deutsche Bank, he co-founded AQUMON in 2015. Currently as CEO & co-founder he leads business development and product development at AQUMON.
Disclaimer: This blog is a translation of an article from nikkei.com. The translation is for informational purposes only. The original and official version could be found here.
About us
As a leading startup in the FinTech space, AQUMON aims to make sophisticated investment advice cost-effective, transparent and accessible to both institutional and retail markets, via the adoptions of scalable technology platforms and automated investment algorithms.
AQUMON’s parent company Magnum Research Limited is licensed with Type 1, 4 and 9 under the Securities and Futures Commission of Hong Kong. In 2017, AQUMON became the first independent Robo Advisor to be accredited by the SFC.
AQUMON’s investors include Alibaba Entrepreneurs Fund, Bank of China International and HKUST.
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